Monthly Archives: May 2017

Does Pay More Get, Less Make Sense?

 

Like Santa Claus and the Easter Bunny, the myth endures that Canada has a system of healthcare services that is among the best in the world. Unlike Santa and Br’er Rabbit however, both as benevolent as it gets, the widespread belief that healthcare in Canada is top drawer is both wrong and an obstacle to making it right. The public complacency it generates is a major obstacle to the transformative changes long known to be essential to enhancing the health of the citizenry at a reasonable and sustainable cost. It doesn’t make sense to spend so much on healthcare that we have to underfund education, financial security, affordable housing, and others of the social determinants of health that collectively determine fully 75% of the health of the population[1]. When it comes right down to optimizing the health of Canadians, healthcare’s repair-shop tail is wagging the dog!

What are the facts about the quality and cost of our so-called “system”?

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Renovating the Icon: Changing Healthcare

 

Apart from idealists, there are only two reasons people change from the status quo, you’re better off if you do and worse off if you don’t (carrots and sticks). And so it is for the fourteen provincial, territorial, and federal programs collectively referred to as the Canadian healthcare ‘system’, now 50 years old. Despite widespread recognition of the need for and recommendations on what should be changed and how, healthcare remains in 2017 much as Tommy Douglas described it in a speech in 1982, 21 years after it began in Saskatchewan:

… we pointed out that (Medicare) would be in two phases. The first phase would be to remove the financial barrier between those giving the service and those receiving it. The second phase would be to reorganize and revamp the delivery system—and of course, that’s the big item. It’s the big thing we haven’t done yet.”[1]

Why it is taking so long to “reorganize and revamp” healthcare? A major reason is the lack of leadership both by governments and the providers of health and healthcare services. The latter, particularly acute care hospitals, their employees, and some physicians, fear being worse off, that reform of healthcare will dilute and weaken their long-standing financial advantages. Provincial governments are intimidated by the well-tested capacity of medical, nursing, and other provider organizations to generate negative public reaction to proposals for change by “death in the streets” rhetoric. But the principal reason continues to be that Canada’s provinces and territories have not faced a crisis sufficiently severe and prolonged as to overwhelm resistance to change or to shake the public’s passive acceptance of paying high costs for a relatively narrow range of services of mediocre quality at best.[2]

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Restrained Healthcare Spending Anchors Ontario’s Balanced Budget

 

On April 27 the Ontario government presented a balanced budget for the 2017-18 fiscal year, a projection made credible by last year’s estimated deficit of $1.5 billion. The return to balance marks an important milestone in the fiscal journey from deficits of $19.3 and $14 billion for 2009-10 and 2010-11 respectively. How did they do it?

One perspective is to analyze how the story played out relative to the projections and recommendations of the 2012 report of the Commission on the Reform of Ontario’s Public Finances. The Commission was established in 2011 to advise how to return to balance by 2017-18. Its plan was based on spending restraint coupled with almost no policy-based revenue enhancement. Continue reading

Post-Mortem on the Commission on the Reform of Ontario’s Public Services: Discipline in Health Spending the Anchor to Returning to Budget Balance

 

The Ontario Government struck the Commission on the Reform of Ontario’s Public Services (the Commission) in 2011 with the singular mandate of advising on how to balance Ontario’s budget by 2017-18. The Commission reported in early 2012 with a plan to balance the budget in 2017-18 on the basis of restraint in spending and almost no policy enhancement to revenues. The Commission used what it felt was modest, but realistic economic assumptions.

The Commission was created in the context of an Ontario deficit of $19.3 billion in 2009-10 and $14.0 billion in 2010-11. There was little confidence from analysts, the media and likely the public at the time that the deficit would be reined in and considerable skepticism that the Government would limit spending as severely as the Commission recommended. Yet on April 27, 2017 the Ontario Government released a budget showing a balanced budget for 2017-18. Given an estimated deficit of only $1.5 billion for 2016-17, the projection of balance does not seem nearly as far-fetched as once perceived. Not only does the Budget project a balance for this year, but the projected net debt-to-GDP ratio for 2017-18 of 37.5 per cent is close to the Commission’s “preferred scenario” of 37.0 per cent indicating that the province’s fiscal track over the past 7 years has not substantially deviated from the Commission’s recommendations. Continue reading